The China Agenda

By Henry Howard

Jan 19, 2018Jan 19, 2018

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Soon after Terry Branstad was elected governor of Iowa in 1982, he headed several delegations to China. High-ranking officials there made reciprocal visits to the Hawkeye State. On one of those trips, China’s current president, Xi Jinping, paid a personal visit to Branstad, and they bonded.

“We had no idea that he would be the leader of China in the future,” Branstad said. “He was then, basically, in charge of the Feed Association of Zhouzhuang.”

Branstad, the longest-serving governor in U.S. history, reunited with Xi in 2011 in China. “He spends 45 minutes telling me how much he loves Iowa, and how that was his first trip to America, how well we treated him. He calls us old friends.”

They reconnected again last summer, when President Trump nominated the former commander of American Legion Post 235 in Lake Mills, Iowa, to serve as U.S. ambassador to China. The opportunity is the latest in a long career of service for Branstad, a Vietnam War Army veteran and former American Legion Baseball player.

“There’s a certain camaraderie among people who serve their country,” Branstad said after being nominated. “I served at a very difficult time. Vietnam was not a very popular time, and it wasn’t easy. I’m very proud that I accepted a call to serve my country. I love this country, and I think The American Legion is a great patriotic organization. It’s also a way to maintain those friendships and the camaraderie that was built up from time in the service.”

Branstad spoke with The American Legion Magazine from Beijing last fall about some of the key issues he’s confronting at a complex time, both in terms of global security and economy, in the U.S.-China relationship.

China has made waves with the speed and scale of its terraforming program, building and claiming islands in the South China Sea. How should the United States strategically approach this issue, which an international court has deemed illegal?

The president (in November) completed a trip here to Asia. He was in Japan and Korea before coming to China, and then was in Vietnam and in Manila in the Philippines. He met with the Asian countries that have concerns. I know there are efforts being made to make sure there is no further militarization of the islands in the South China Sea. The United States also has continued to conduct a freedom-of-navigation of our Navy vessels through that area on a continuous basis.

China is growing its military strength and presence, including a base in Djibouti and possibly Pakistan. What is the most appropriate way for the United States to address these developments?

As China’s regional and international interests grow more complex, I expect that the People’s Liberation Army’s international engagement will continue to expand. China recently completed construction of the military base in Djibouti. This initiative and others reflect and amplify China’s growing influence. We recognize China’s contributions to African peace and security through multilateral mechanisms, such as deployment of peacekeepers in regions affected by strife and Chinese involvement in counterpiracy efforts off the Horn of Africa. More broadly, the United States and China engage in military discussions to deepen substantive cooperation on issues where our interests converge and provide both sides opportunities to express mutual concern and avoid conflict where our interests are divergent. I was with the chairman of the Joint Chiefs, Gen. (Joseph) Dunford, when he visited China. The United States and China have many difficult issues where we will not necessarily have the same perspectives, but we share a commitment to working through difficulties. I was encouraged with the military-to-military contacts, and we think that continues to be very important to avoid miscalculations.

The trade deficit has been an issue for some time. The president has already reached some trade deals with China, including the export of U.S. beef. What’s next?

I am pleased that, after 14 years, one of the first things that happened after I got here was the Chinese market opening to American beef. There has been a 25 percent increase in beef exports this year, and China has certainly played a role in that. But we sell a lot of soybeans and a lot of pork here in the Chinese market as well. We are hopeful that we are going to see some reduction in the tariffs on ethanol.

During the president’s visit, there were $250 billion worth of contracts and MOUs (memorandums of understanding) signed in different areas. One of the areas that is really growing is energy and the sale of liquid natural gas. The governor of Alaska has a project that’s going to be over $40 billion in Chinese investment, and it means long-term potential sales here of liquid natural gas.

I would also say that the state of Iowa has had a sister state (relationship) with Hebei province since 1983, my first year as governor. The first province I visited as ambassador was Hebei, which surrounds Beijing. The party’s secretary and the governor of Hebei both told me that in the next five years they intend to convert all home heating from coal to natural gas.

What about other opportunities with respect to trade, specifically steel, aluminum and auto parts? How should the United States address those areas with China?

We welcome our president’s efforts to tackle the Chinese overcapacity in both steel and aluminum to supply-side reforms, but more needs to be done. We look forward to China fulfilling its pledges to do more to open its markets and level the playing field for U.S. workers, farmers, ranchers and companies. That said, the United States won’t hesitate to use all the tools at our disposal, including multilateral and unilateral trade remedies, to address the lack of fair balance in reciprocal trade relationships.

How concerned are you about cyberattacks from China, and how do you envision working to eliminate or at least minimize them?

There’s been some progress. But cybersecurity continues to be an important issue for the United States and China. We’re finding that North Korea is a source for some of these cyberattacks as well. It’s important that our two countries pursue a sustained, meaningful dialogue to reduce the risk and develop a shared understanding of acceptable state behavior in cyberspace. We have to be vigilant about it. But the United States remains troubled by the increasing restrictive policies we see that limit access of U.S. technology companies to the market here in China.

The United States has withdrawn from the global climate pact. What effect do you see that having on our relations with China, which is still part of that pact?

I don’t think it is going to have a significant impact because we have already provided technology and assistance to China in dealing with its pollution issues. I come from a state that is a leader in that issue; Iowa is the leading producer of ethanol. We produce more ethanol than we consume in gasoline. And that’s very different than it was when I was first elected in ’82. Unfortunately, we relied primarily on imported gasoline from the Middle East. We are also a leader in biodiesel, and 35.8 percent of Iowa’s electricity comes from wind – more than any other state in America.

I have already talked with the Chinese about how to use more ethanol, and they’re talking about going to 10 percent ethanol by 2020. Believe it or not, they’re still using methyl tert-butyl ether (MTBE), which polluted the groundwater on the East Coast and West Coast and was banned in most U.S. states more than a decade ago. So if we can replace MTBE with ethanol, that’s not only good for the environment, but it could increase imports from the United States.

We also think there’s an opportunity in the wind area. The problem in China is having the infrastructure to be able to transport electricity generated by wind to the urban areas, where they have the need for additional electricity. That’s a big issue to Chinese consumers because air quality is really bad here and especially in Beijing and northeast China. We believe in going to energy as opposed to coal home heating, and for their industry, as well, using more ethanol, biodiesel and other renewable energy.

Another thing: I sat in on a meeting with Bill Gates and the president of the biggest coal company in China. They have a joint venture they’re working on for fourth-generation nuclear plants that would be pollution-free, and that could make a big difference. So there’s an opportunity for us to collaborate in the nuclear area. That’s expensive, but it has a lot of potential to address some of the pollution problems China has.

When you leave the ambassador’s office, what would success look like to you regarding the precarious U.S.-China relationship?

I’m very focused on the relationship today and the role I play as U.S. ambassador to China. When I met with President Trump before I came to Beijing, he gave me two marching orders: partner with China to denuclearize North Korea, and rebalance our trade relationship with China to make it more fair and reciprocal.

On the recent state visit, President Trump spoke directly with President Xi about our shared interest and concern. They agreed that we need to work together to expand areas of cooperation and generate positive outcomes for the benefit of all our citizens. Addressing our differences directly and frankly is the best way to solve problems.

Our trade relationship with China is already one of the largest in the world. But it is still restricted in many ways, across many sectors of the economy. Any meaningful step that makes that relationship more fair and reciprocal would be a success. China needs to liberalize the trade and investment environment for the benefit of both U.S. workers and the Chinese market. China needs to allow American products and American investors into its market on the same terms that Chinese products and investments enjoy in America and in other countries. Moving forward, these elements of our commercial engagement must be fair, balanced and reciprocal.

On North Korea, the key topic of discussion between our presidents was our continued joint effort to increase pressure and persuade North Korea to abandon its illegal nuclear and missile program. President Trump and President Xi affirmed their commitment to achieve a complete, verifiable and permanent denuclearization of the Korean peninsula. The bottom line is that President Trump and President Xi will not accept a nuclear-armed North Korea.

Henry Howard is deputy director of media and communications for The American Legion.